Recapitalizing Banking Systems
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Recapitalizing Banking Systems
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Author : Patrick Honohan
language : en
Publisher: World Bank Publications
Release Date : 2001
Recapitalizing Banking Systems written by Patrick Honohan and has been published by World Bank Publications this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with Bank failures categories.
After a banking crisis, when authorities have decided to use budgetary funds to help restructure a large failed bank or banking system, apparent conflicts between various goals (involving incentives for the new bank management, for the government's budget, and for monetary stability) can be resolved by suitably designing financial instruments and appropriately allocating responsibility between different arms of government.
Recapitalizing Banking Systems
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Author : Patrick Honohan
language : en
Publisher:
Release Date : 2013
Recapitalizing Banking Systems written by Patrick Honohan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2013 with categories.
In the aftermath of a banking crisis, most attention is rightly focused on allocating losses, rebuilding properly managed institutions, and achieving debt recovery. But the authorities' decision to use budgetary funds to help restructure a large failed bank or banking system also has consequences for the incentive structure for the new bank management, for the government's budget, and for monetary stability. These issues tend to be lumped together, but each should be dealt with in a distinctive manner. The author points out, among other things, how apparent conflicts between the goals in each of these areas can be resolved by suitably designing financial instruments and appropriately allocating responsibility between different arms of government. First the government must have a coherent medium-term fiscal strategy that determines broadly how the costs of the crisis will be absorbed. Then the failed bank must be securely reestablished with enough capital and franchise value to move forward as a normal bank. This will typically entail new financial institutions involving the government on both the asset and the liability sides of the bank's balance sheet. The bank should not be left with mismatches of maturity, currency, repricing. Assets that are injected should be bankable and preferably negotiable. The liability structure should give bank insiders the incentive to manage the bank prudently. Financial instruments can be complex and sophisticated but only if the government has the credibility to warrant market confidence that it will deliver on the contracts rather than trying to use its lawmaking powers to renege. Innovative use of segregating sinking funds and "Brady"-type bonds can help where government credibility is weak. Restructuring the bank will alter the size, maturity, and other characteristics of the government's debt. These characteristics should be optimized separately and with the market as a whole, not just the affected banks.
Recapitalizing Banking Systems Implications For Incentives And Fiscal And Monetary Policy
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Author : Patrick Honohan
language : en
Publisher:
Release Date : 1999
Recapitalizing Banking Systems Implications For Incentives And Fiscal And Monetary Policy written by Patrick Honohan and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999 with categories.
February 2001 After a banking crisis, when authorities have decided to use budgetary funds to help restructure a large failed bank or banking system, apparent conflicts between various goals (involving incentives for the new bank management, for the government's budget, and for monetary stability) can be resolved by suitably designing financial instruments and appropriately allocating responsibility between different arms of government. In the aftermath of a banking crisis, most attention is rightly focused on allocating losses, rebuilding properly managed institutions, and achieving debt recovery. But the authorities' decision to use budgetary funds to help restructure a large failed bank or banking system also has consequences for the incentive structure for the new bank management, for the government's budget, and for monetary stability. These issues tend to be lumped together, but each should be dealt with in a distinctive manner. Honohan points out, among other things, how apparent conflicts between the goals in each of these areas can be resolved by suitably designing financial instruments and appropriately allocating responsibility between different arms of government. First the government must have a coherent medium-term fiscal strategy that determines broadly how the costs of the crisis will be absorbed. Then the failed bank must be securely reestablished with enough capital and franchise value to move forward as a normal bank. This will typically entail new financial instruments involving the government on both the asset and the liability sides of the bank's balance sheet. The bank should not be left with mismatches of maturity, currency, or repricing. Assets that are injected should be bankable and preferably negotiable. The liability structure should give bank insiders the incentive to manage the bank prudently. Financial instruments can be complex and sophisticated but only if the government has the credibility to warrant market confidence that it will deliver on the contracts rather than trying to use its lawmaking powers to renege. Innovative use of segregating sinking funds and "Brady"--Type bonds can help where government credibility is weak. Restructuring the bank will alter the size, maturity, and other characteristics of the government's debt. These characteristics should be optimized separately and with the market as a whole, not just the affected banks. This paper--a product of Finance, Development Research Group--is part of a larger effort in the group to examine the effects of bank regulation. The author may be contacted at [email protected].
Recapitalizing Banks With Public Funds
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Author : International Monetary Fund
language : en
Publisher: International Monetary Fund
Release Date : 1999-10-01
Recapitalizing Banks With Public Funds written by International Monetary Fund and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 1999-10-01 with Business & Economics categories.
Recapitalizing banks in a systemic crisis is a complex medium-term process that requires significant government intervention and careful management at both the strategic and individual bank levels. This paper highlights the range of operational and strategic issues to be addressed and the institutional arrangements needed to foster an effective banking system restructuring and maximize the returns on government investment. The approaches to recapitalization have varied, with countries choosing different mixes of direct capital injections and asset purchase and rehabilitation. The choice of an appropriate mix is critical, to minimize the expected present value of government outlays net of recoveries.
Condition And Recapitalization Of The Bank Insurance Fund
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Author : United States. Congress. House. Committee on Banking, Finance, and Urban Affairs
language : en
Publisher:
Release Date : 1991
Condition And Recapitalization Of The Bank Insurance Fund written by United States. Congress. House. Committee on Banking, Finance, and Urban Affairs and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991 with Deposit insurance categories.
Competition Vs Stability Oligopolistic Banking System With Run Risk
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Author : Mr. Damien Capelle
language : en
Publisher: International Monetary Fund
Release Date : 2021-04-23
Competition Vs Stability Oligopolistic Banking System With Run Risk written by Mr. Damien Capelle and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2021-04-23 with Business & Economics categories.
This paper develops a model where large financial intermediaries subject to systemic runs internalize the effect of their leverage on aggregate risk, returns and asset prices. Near the steady-state, they restrict leverage to avoid the risk of a run which gives rise to an accelerator effect. For large adverse shocks, the system enters a zone with high leverage and possibly runs. The length of time the system remains in this zone depends on the degree of concentration through a franchise value, price-drop and recapitalization channels. The speed of entry of new banks after a collapse has a stabilizing effect.
Issuing Government Bonds To Finance Bank Recapitalization And Restructuring
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Author : Mr.Michael Andrews
language : en
Publisher: International Monetary Fund
Release Date : 2003-11-01
Issuing Government Bonds To Finance Bank Recapitalization And Restructuring written by Mr.Michael Andrews and has been published by International Monetary Fund this book supported file pdf, txt, epub, kindle and other format this book has been release on 2003-11-01 with Business & Economics categories.
Bonds issued by the government or government agencies are often used to finance bank restructuring following a systemic crisis. Many conflicting considerations affect the design of the bonds used to pay for public sector investment in bank equity or the purchase of distressed assets from banks. Some bond features can leave restructured banks facing significant risks, laying the foundation for future banking sector problems. Sovereign default makes publicly financed bank restructuring more difficult, but it is still possible to carry out if banks receive sufficient interest income to provide a margin over their cost of funds.
The Italian Banking System
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Author : Stefano Cosma
language : en
Publisher: Springer
Release Date : 2012-11-13
The Italian Banking System written by Stefano Cosma and has been published by Springer this book supported file pdf, txt, epub, kindle and other format this book has been release on 2012-11-13 with Business & Economics categories.
Why was the Italian Banking System more resilient during the sub-prime crisis and harder-hit in the sovereign crisis? Will their strength in the retail market result as an asset or a liability for Italian banks in the future? This book offers an in-depth analysis of one of the most important EU banking systems its attempts to weather the crisis.
Administration Proposal To Recapitalize The Bank Insurance System Modify The Regulation Of Banks And Other Depository Institutions And Expand Allowable Activities Of Banking Corporations
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Author : United States. Congress. House. Committee on Ways and Means
language : en
Publisher:
Release Date : 1991
Administration Proposal To Recapitalize The Bank Insurance System Modify The Regulation Of Banks And Other Depository Institutions And Expand Allowable Activities Of Banking Corporations written by United States. Congress. House. Committee on Ways and Means and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1991 with Business & Economics categories.
Creating Efficient Banking Systems
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Author : Claudia M. Buch
language : en
Publisher:
Release Date : 1996
Creating Efficient Banking Systems written by Claudia M. Buch and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1996 with Banks and banking categories.